Materials management
Encyclopedia
Materials management can deal with campus planning and building design for the movement of materials, or with logistics that deal with the tangible components of a supply chain
. Specifically, this covers the acquisition of spare parts and replacements, quality control
of purchasing and ordering such parts, and the standards involved in ordering, shipping, and warehousing the said parts.
In some companies materials management is also charged with the procurement of materials by establishing and managing a supply base. In other companies the procurement and management of the supply base is the responsibility of a separate purchasing department. The purchasing department is then responsible for the purchased price variances from the supply base.
In large companies with multitudes of customer changes to the final product over the course of a year, there may be a separate logistics department that is responsible for all new acquisition launches and customer changes. This logistics department ensures that the launch materials are procured for production and then transfers the responsibility to the plant materials management
Materials management is not a science and depending upon the relevance and importance that company officials place upon controlling material flow, the level of expertise changes. Some companies place materials management on a level whereby there is a logistics director, other companies see the importance level as managing at the plant level by hiring an inventory manager or materials manager, and still other companies employ the concept that the supervisors in the plant are responsible accompanied by a planners.
Because there are no standards there is only best practices for any particular business sector that are widely used. For example, the generation of releases to the supply base come in many forms from the lowest level that requires sending facsimilies and PDF files, the EDI information exchange, to the ultimate practice of a supplier web base site.
The major issues that all materials managers face are incorrect bills of materials, inaccurate cycle counts, un-reported scrap, shipping errors, receiving errors, and production reporting errors. Materials managers have striven to determine how to manage these issues in the business sectors of manufacturing since the beginning of the industrial revolution. Although there are no known methods that eliminate the afore mentioned inventory accuracy inhibitors, there are best methods available to eliminate the impact upon maintaining an interrupted flow of materials for production.
One challenge for materials managers is to provide timely releases to the supply base. On the scale of worst to best practices, sending releases via facsimile or PDF file is the worst practice and transmitting releases to the supplier based web site is the best practice. Why? The flaw in transmitting releases via facsimile or email is that they can get lost or even interpreted incorrectly into the suppliers system resulting in a stock out. The problem with transmitting EDI releases is that not all suppliers have EDI systems capable of receiving the release information. The best practice is to transmit the releases to a common supplier web base site where the suppliers can view (for free) the releases. The other advantage is that the supplier is required to use the carrier listed in the web site, must transmit an ASN (advanced shipping notification), and review the accumulative balances of the order
throughout the health care industry. In 2010 Material Management Week is October 4-10.
A materials management plan may include planning guidelines or full design for the following:
An effective materials management plan also means a more holistic approach to managing vehicle use and emissions, solid waste, hazardous waste, recycling, and utility services. As a result, this means a “greener,” more sustainable environment and a manifestation of the many demands today for institutions to become more environmentally friendly. In fact, thanks to such environmental advantages, creative materials management plans may qualify for LEED Innovation in Design credits.
And finally, an effective materials management plan can improve aesthetics. Removing unsafe and unsightly conditions, placing core services out of sight, and creating a more pedestrian-friendly environment will improve the visual and physical sense of place for those who live and work there.
Supply chain
A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to...
. Specifically, this covers the acquisition of spare parts and replacements, quality control
Quality control
Quality control, or QC for short, is a process by which entities review the quality of all factors involved in production. This approach places an emphasis on three aspects:...
of purchasing and ordering such parts, and the standards involved in ordering, shipping, and warehousing the said parts.
Goals
The goal of materials management is to provide an unbroken chain of components for production to manufacture goods on time for the customer base. The materials department is charged with releasing materials to a supply base, ensuring that the materials are delivered on time to the company using the correct carrier. Materials is generally measured by accomplishing on time delivery to the customer, on time delivery from the supply base, attaining a freight budget, inventory shrink management, and inventory accuracy. The materials department is also charged with the responsibility of managing new launches.In some companies materials management is also charged with the procurement of materials by establishing and managing a supply base. In other companies the procurement and management of the supply base is the responsibility of a separate purchasing department. The purchasing department is then responsible for the purchased price variances from the supply base.
In large companies with multitudes of customer changes to the final product over the course of a year, there may be a separate logistics department that is responsible for all new acquisition launches and customer changes. This logistics department ensures that the launch materials are procured for production and then transfers the responsibility to the plant materials management
Standards
There are no standards for materials management that are practiced from company to company. Most companies use ERP systems such as SAP, Oracle, BPCS, MAPICS, and other systems to manage materials control. Small concerns that do not have or cannot afford ERP systems use a form of spreadsheet application to manage materials.Materials management is not a science and depending upon the relevance and importance that company officials place upon controlling material flow, the level of expertise changes. Some companies place materials management on a level whereby there is a logistics director, other companies see the importance level as managing at the plant level by hiring an inventory manager or materials manager, and still other companies employ the concept that the supervisors in the plant are responsible accompanied by a planners.
Because there are no standards there is only best practices for any particular business sector that are widely used. For example, the generation of releases to the supply base come in many forms from the lowest level that requires sending facsimilies and PDF files, the EDI information exchange, to the ultimate practice of a supplier web base site.
Materials Management Challenges
The major challenge that materials managers face is maintaining a consistent flow of materials for production. There are many factors that inhibit the accuracy of inventory which results in production shortages, premium freight, and often inventory adjustments.The major issues that all materials managers face are incorrect bills of materials, inaccurate cycle counts, un-reported scrap, shipping errors, receiving errors, and production reporting errors. Materials managers have striven to determine how to manage these issues in the business sectors of manufacturing since the beginning of the industrial revolution. Although there are no known methods that eliminate the afore mentioned inventory accuracy inhibitors, there are best methods available to eliminate the impact upon maintaining an interrupted flow of materials for production.
One challenge for materials managers is to provide timely releases to the supply base. On the scale of worst to best practices, sending releases via facsimile or PDF file is the worst practice and transmitting releases to the supplier based web site is the best practice. Why? The flaw in transmitting releases via facsimile or email is that they can get lost or even interpreted incorrectly into the suppliers system resulting in a stock out. The problem with transmitting EDI releases is that not all suppliers have EDI systems capable of receiving the release information. The best practice is to transmit the releases to a common supplier web base site where the suppliers can view (for free) the releases. The other advantage is that the supplier is required to use the carrier listed in the web site, must transmit an ASN (advanced shipping notification), and review the accumulative balances of the order
Improving circulation infrastructure
Redundancy can be reduced and effectiveness is increased when service points are clustered to reduce the amount of redundancy. An effective materials management program can also resolve “island” approaches to shipping, receiving, and vehicle movement. Solutions can include creating a new central loading location, as well consolidating service areas and docks from separate buildings into one. Developing better campus circulation infrastructure also means re-evaluating truck delivery and service vehicle routes. Vehicle type, size, and schedules are studied to make these more compatible with surrounding neighborhoods. This will reduce truck traffic, creating a safer environment for pedestrians and a more attractive environment for other uses.Materials Management Week
Each year, an entire week is dedicated to celebrating resource and materials management professionals for their outstanding contributions to healthcare and the overall success of the supply chain. Sponsored by the Association for Healthcare Resource & Materials Management (AHRMM), National Healthcare Resource & Materials Management Week (MM Week) provides an opportunity to recognize the integral role materials management professionals play in delivering high-quality patient careHealth care
Health care is the diagnosis, treatment, and prevention of disease, illness, injury, and other physical and mental impairments in humans. Health care is delivered by practitioners in medicine, chiropractic, dentistry, nursing, pharmacy, allied health, and other care providers...
throughout the health care industry. In 2010 Material Management Week is October 4-10.
Overview
Materials management plans and designs for the delivery, distribution, storage, collection, and removal of occupant-generated streams of materials and services. It is usually an additional service that is offered as part of a campus planning process or a building design project. It is most beneficial for university, health care, and corporate environments. Materials management looks at the planning and design considerations needed to support the efficient delivery and removal of goods and services that support occupant activity. The streams of occupant-generated materials and activity include mail, office supplies, lab supplies, food, special deliveries, custodial services, building supplies, waste and recycling, and service calls.A materials management plan may include planning guidelines or full design for the following:
- Truck delivery and service vehicle routes, to reduce vehicle / pedestrian conflict
- Loading docks and delivery points, to increase accommodation and reduce queuing and vehicle idling
- Recycling, trash, and hazardous waste collection and removal, to increase waste diversion and reduce costs
- Service equipment and utility infrastructure relocation or concealment, to improve aesthetics and realize landscaping goals
- Regulatory and operation planning
Benefits
The effective materials management plan builds from and enhances an institutional master plan by filling in the gaps and producing an environmentally responsible and efficient outcome. An institutional campus, office, or housing complex can expect a myriad of benefits from an effective materials management plan. For starters, there are long-term cost savings, as consolidating, reconfiguring, and better managing a campus’ core infrastructure reduces annual operating costs. An institutional campus, office, or housing complex will also get the highest and best use out of campus real estate.An effective materials management plan also means a more holistic approach to managing vehicle use and emissions, solid waste, hazardous waste, recycling, and utility services. As a result, this means a “greener,” more sustainable environment and a manifestation of the many demands today for institutions to become more environmentally friendly. In fact, thanks to such environmental advantages, creative materials management plans may qualify for LEED Innovation in Design credits.
And finally, an effective materials management plan can improve aesthetics. Removing unsafe and unsightly conditions, placing core services out of sight, and creating a more pedestrian-friendly environment will improve the visual and physical sense of place for those who live and work there.